Apple Supplier Dialog Semi Holds Talks With Suitors Including Renesas

Dialog Semiconductor Plc, the U.K. chip designer whose clients include Apple Inc., said it’s in advanced discussions to sell the company to Japan’s Renesas Electronics Corp. for about 4.9 billion euros ($5.9 billion).

The all-cash offer price of 67.50 euros per share is 20% above Dialog’s Friday close of 56.12 euros. Shares of the Frankfurt-listed company have risen around 25% since the start of the year, boosted by strong demand for Apple’s 5G handsets as well as takeover speculation.

“A further announcement will be made as and when appropriate,” Dialog said in a statement after Bloomberg reported on the talks. “There can be no certainty that any firm offer will be made for the company, nor as to the terms on which any firm offer might be made.”

Dialog had been in advanced talks with suitors including Renesas and working with advisers, people familiar with the matter said earlier on Sunday. The company was previously holding discussions with STMicroelectronics NV before the Franco-Italian company was outbid, the people said.

The volume of deals involving semiconductor companies more than doubled last year to $144 billion, according to data compiled by Bloomberg. Nvidia Corp. agreed in September to buy SoftBank Group Corp.’s chip division Arm Ltd. for $40 billion, taking control of some of the most widely used chip technology in the industry’s largest-ever deal.

Any deal could draw scrutiny from U.K. regulators as countries grow more protective of strategic industries such as semiconductors. Nvidia’s deal for Arm is set to be investigated by the country’s competition watchdog. The Competition and Markets Authority has said it will apply greater scrutiny to strategic tech deals, regardless of size.

The U.K. government is also planning to introduce new rules that would allow officials to look at past takeovers and mergers where concerns have been raised.

Renesas, which has a market value of $20.5 billion in Tokyo, is one of the largest suppliers of semiconductors used in cars. It also has European offices in the U.K. and Germany. In 2019, Renesas completed its acquisition of U.S. firm Integrated Device Technology Inc., a deal valued at more than $6 billion that helped it expand beyond the automotive sector.

Dialog and Renesas have been working together for over a decade. The U.K. company, which specializes in designing power management chips, said in August that it would collaborate with Renesas on car computing platforms.

Both companies have found themselves part of tensions concerning the semiconductor supply chain. Apple was grappling with a shortage of vital chips that manage power consumption in iPhones and other devices, people with knowledge of the matter said in November. Within the auto industry, a semiconductor shortage is forcing car makers to halt production lines and is straining their relationship with chip suppliers.

Like Dialog, Renesas is also a supplier to Apple. The U.S. tech giant was reported to be in talks to buy Renesas SP Drivers, 55% owned by Renesas, in 2014. The unit, which managed LCD displays, was later sold to Synaptics Inc. for $475 million.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.